Tough times lead to tough prenups
Prenups for people of all ages are becoming increasingly common, says Marlene Eskind Moses, president of the American Academy of Matrimonial Lawyers and a family law practitioner in Nashville. More than 73% of members of the AAML say they've seen an uptick in clients seeking prenuptial agreements with at least half of them initiated by women.
One of the big reasons for the increasing number of prenups is debt, Moses says. Couples with big school loans don't want to saddle each other with these obligations.
Prenups related to this issue sometimes also include a fairness clause that allows for the spouse who is working while the other half of the couple goes to grad school be supported when it's their turn to get an advanced degree.
Owning an underwater house can be grounds for a prenup, too, preventing the non-owner from having to assume part of this albatross if the marriage goes sour.
Loans to start businesses also drive people to prenups. If either the business or the marriage fails, the debt -- and sometimes the returns -- stay with the business owner.
Older couples are signing prenups to keep their retirement plans separate, Moses says, including pensions, IRAs and 401(k)s. Sometimes these are plans acquired or accumulated before the marriage. Other times, later-life couples even keep retirement assets separate that are added after the marriage.
No matter what the underlying issue, enforcement of these agreements requires some care and feeding during the marriage, If couples don't keep their accounts separate, they can easily nullify the prenup. "If either a debt or an asset is going to be treated separately, there needs to be a brick wall that separates marital from individual funds," Moses advises.
In other words, each half of the couple uses his or her own income to pay those obligations that are theirs alone. No cozy marital sharing of the money. Sounds like a recipe for divorce to me.